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T H E M O R T G A G E M I S E R Version 1.3 Released January 1992 By Practical Solutions 16541 Suite# 343 Redmond, Wa. 98052 (206) 868-3336 Copyright (C) l991 by Jim Peters All Rights Reserved _______ ____|__ | (R) --| | |------------------- | ____|__ | Association of | | |_| Shareware |__| o | Professionals -----| | |--------------------- |_______| MEMBER CompuServe (70751, 1772) pg 1 T A B L E O F C O N T E N T S Product Examination Information...........2 ASP Member................................2 Purchase / Registration...................3 License Restrictions......................3 Product Upgrades..........................3 Product Support...........................4 Warranty..................................4 Customer Participation....................4 System Requirements & Setup...............5 Definitions & Terminology.................6 Introduction..............................7 Getting Started...........................8 A Mortgage Commentary....................17 pg 2 P R O D U C T E X A M I N A T I O N I N F O R M A T I O N The Mortgage Miser program hereafter referred to as "The Product" is not "Public Domain Software", nor is it "Freeware". It is the registered property of the Practical Solutions Company, Copyright (C) l991. A limited use license is hereby granted to persons who wish to review the product for suitability to their particular requirements. Usage of the product beyond a reasonable 10 day examination period shall be considered acceptance, and requires registration. Continued usage of the product beyond the examination period by Non-Registered persons is prohibited. Neither The Mortgage Miser program nor any of its documentation components may be modified in any respect, including de-compiling, disassembling and/or any other form of reverse engineering. All documentation components (files) must be preserved intact and retained with the executable computer program(s). Distribution of The Mortgage Miser program is encouraged provided the above conditions are met. The product may be distributed through public shareware channels including electronic bulletin boards provided no fees are accepted for such distribution, with the exception that a fee not to exceed $5.00 US may be charged by legitimate shareware businesses for replication and overhead expenses. A S P M E M B E R Practical Solutions is a member of the Association of Shareware Professionals (ASP). ASP wants to make sure that the shareware principle works for you. If you are unable to resolve a shareware-related problem with an ASP member by contacting the member directly, ASP may be able to help. The ASP Ombudsman can help you resolve a dispute or problem with an ASP member, but does not provide technical support for members products. Please write to the ASP Ombudsman at 545 Grover Road, Muskegon, MI 49442-9427 or send a CompuServe message via CompuServe Mail to ASP Ombudsman 70007,3536. pg 3 P U R C H A S E R E G I S T R A T I O N Anyone who intends to continue using The Mortgage Miser program beyond the 10 day examination period is encouraged to legitimize their usage through purchase registration. For the nominal $39.95 Registration fee the user will receive the latest version of the product, including documentation files, and will be notified when major upgrade enhancements and additional features become available. Site Licenses are offered at the rate of $99.95. Registration is accomplished as follows: Print the Purchase Registration Form from the MAIN MENU of The Mortgage Miser Program using option F5. Complete the information, enclose the registration fee, and mail your order to Practical Solutions. You will receive a registered copy of the latest version of The Mortgage Miser. Current distribution media for The Mortgage Miser is one 360KB 5 1/4" diskette. If your system requires the 3 1/2" disk media, please note that requirement on the order form. Non-residents of the United States please be advised to make checks drawn on U.S. Funds. Washington State Residents must include 8.2% Sales Tax for each copy requested. Please include $1.50 for shipping and handling. L I C E N S E R E S T R I C T I O N S Product registration grants purchasers a limited use license and one (1) copy of the product for personal use on one (1) non-networked Personal Computer. Site licensing for multiple users may also be obtained (See Purchase Registration). Registered users will be provided with the latest software updates and product documentation at the time of purchase and will be notified of any major upgrade enhancements. Neither The Mortgage Miser program nor any of its documentation components may be modified in any respect, including de-compiling, disassembling or any other form of reverse engineering. Duplication of the registered version of the product is prohibited. P R O D U C T U P G R A D E S Registered users of the product may upgrade to the latest software version by sending $10 for each upgrade copy requested. Please use the Purchase Registration Form from the MAIN MENU for upgrade requests, noting any changes in address or telephone number. pg 4 P R O D U C T S U P P O R T Customers who purchase (register) the product are entitled to receive 90 days free product support from the date of purchase. Product support may be provided by mail or telephone by contacting: Practical Solutions 16541 Redmond Way, Suite 343 Redmond, Wa. 98052 Telephone (206) 868-3336 (Message System) CompuServ (70751,1772) Practical Solutions will make every attempt to expediently answer any and all questions and resolve any problems that might arise from the use of this product. All comments and suggestions for improvement are welcomed. W A R R A N T Y Practical Solutions warrants that the diskette media upon which the software is recorded shall be free from defects in material and workmanship, under normal use and conditions, for a period of sixty (60) days from the date of purchase. EXCEPT FOR THE FOREGOING LIMITED WARRANTY, THE MORTGAGE MISER SOFTWARE IS PROVIDED "AS IS" WITHOUT ANY WARRANTY, EXPRESSED OR IMPLIED, INCLUDING, BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. The Practical Solutions Company shall not be liable for any damages, whether direct, indirect, special or consequential arising from a failure of the product to perform or operate in a manner desired by the registered or unregistered user. The Practical Solutions Company shall not be liable for any damages to data or property which may be caused directly or indirectly by the use of this product. In no event shall the Practical Solutions Company be liable for any damages, including any lost profits, lost savings or other incidental or consequential damages arising out of the use or persons inability to use this program, or for any claim by any other party. C U S T O M E R P A R T I C I P A T I O N In an effort to provide Total Customer Satisfaction, Practical Solutions welcomes your comments and suggestions related to this product. We consider your criticisms "GOLDEN" and welcome your input. Please feel free to call or write and describe any situations you encountered, features you would like to see added in the future, suggestions, or words of encouragement. Please note the version of the product you are using. Practical Solutions intends to improve the product and provide upgrades based on customer input. Your comments are VERY IMPORTANT to us. pg 5 S Y S T E M R E Q U I R E M E N T S A N D S E T U P System Requirements To use The Mortgage Miser, you Need only an IBM PC or Compatible Computer with a minimum of 256K RAM Memory, one Floppy Diskette Drive, and an IBM Compatible Printer. A hard disk system is recommended. Your system must also have a DOS Version 2.0 or newer operating system. Floppy Disk System Make a "working copy" of the master disk using the DOS Copy Command. Place the WORKING COPY diskette in the disk drive. Fixed Disk Setup To place the program and associated files on a fixed disk, please follow these instructions: Boot your computer to the fixed disk. When complete, place the Mortgage Miser disk in floppy drive A. Determine the fixed disk you will load the product to. ( ie: C or D ) - Position to the root directory of that disk if different than the default disk. (ie for "D" Type D: ) At the DOS Prompt type: MD\ MISER CD\ MISER COPY A:*.* C: ( or COPY A:*.* D: etc.....) - This should load all files from the floppy disk in slot A to the sub-directory "MISER" on the fixed disk drive. If you had any trouble with this, you should refer to your DOS manual under the topic DIRECTORIES. (See Make Directory and Change Directory) Running The Program To Run the program, simply type "MTG" All mortgage models created by The Mortgage Miser will be placed on the disk drive the program was executed from. No path statements are necessary. pg 6 D E F I N I T I O N S & T E R M I N O L O G Y DEFINITIONS & TERMS: The Mortgage, a Death Pledge? (Hey, What a Concept!!!!) MORT \'mo(e)rt\ n [(fr. L mortus, fr. pp. of mori - death, to die) + GAGE] GAGE \'gaj\ n [(fr. Gmc vt. 1. archaic:pledge 2. archaic:stake,risk)] o FUNCTION KEYS Keyboard keys with the letter "F" in front of a number. o MENU The display of a group of related functions (options). o MENU OPTIONS Menu Options are items you can order from the Menu. o RECURRING PRE-PAYMENTS TO PRINCIPAL These are Pre-Payments against The Principal balance of the Mortgage. They are Calculated IN ADDITION TO your normal REQUIRED payment. They are used when you plan to make the same Pre-Payment for a series of months. Recurring Pre-Payments continue in the plan until you stop them. o LUMP SUM PRE-PAYMENTS TO PRINCIPAL Lump Sum Pre-Payments To Principal are just like Recurring Pre-Payments EXCEPT THEY ARE ONLY IN EFFECT ONLY FOR THE MONTH THAT YOU SPECIFY. They are applied IN ADDITION TO required Payments and any Recurring Pre-payments against the Principal. o INTEREST RATE CHANGES Used primarily for Adjustable Rate Mortgages (ARM's). You can select the Payment Number you expect Interest Rates to change. o BALLOON PAYMENT Used when mortgages have an early "Cash Out" stipulation in the contract. If these are present, they are often set up for 5 to 7 years. The mortgage is generally amortized over 30 years. Example - a balloon payment set up for 5 years would be "called" on payment number 60, at which time the balance is due in full. o PAYMENT TO LOAN RATIO This is a number calculated to reflect the number of actual payments you have made in order to reduce the mortage by the face value of 1 normal payment. o AMORTIZATION The way a lending institution calculates the amount of interest you get to pay over a fixed period of time. The amount of your payment that is applied to the principle INCREASES over time and is IMPROVED when the unpaid balance is REDUCED. The end result of a positive amortization mortgage is a balance of ZERO. pg 7 I N T R O D U C T I O N The Mortgage Miser is a powerful mortgage modeling tool which was originally designed to answer OUR question "What if we did __?__ to the mortgage ?". Our goal was simply to accelerate our mortgage as quickly as possible. Although we found a number of software packages that performed many types of mortgage amortizations, we found none that accomodated the "What If" acceleration modeling capabilities we needed. The product was designed for the average person with a mortgage, for those who are thinking about getting a new one, or for anyone considering refinancing. Although it was designed for the homeowner, it's suitable for use by others including Realtors, Brokers and Accountants who also may find the product helpful. Our philosophy is simply that "Get Rich Quick" schemes seldom work for those of us who work for a living. We believe that the reality of "financial security" (as such) must begin with debt elimination, regardless of the type of debt, followed by the maximum utilization of future incomes. In other words - honest work, planning, and a little discipline. Planning is necessary to attain this or any other REAL goal. The Mortgage Miser provides one of the tools necessary to help PLAN the reduction of mortgage debt obligations by means of setting up models in the system (in the privacy of your own home) and running "what-if" scenarios against them. Although the product has many features, we think the most important one is the "Plan" the product generates once a model has been created. Without a plan that you can actually VISUALIZE, there's really only a "pre-concrete" notion, certainly no firm direction, and therefore no commitment. Measuring your progress is the tangible element you need in order to believe in any long range endeavor. It was YOGGI BERRA who was once quoted as saying "If You Don't Know Where You're Going, Any Road Will Get You There.....". The Mortgage Miser is simple to use. It was designed to be simple. There is nothing magic about it, although you may be surprised at the results you see when you begin applying Pre-Payment variables to the models you create. On that note, it probably goes without saying that this product was developed to help PEOPLE and not necessarily financial institutions. So God bless Yoggi Berra and good luck with The Mortgage Miser. pg 8 G E T T I N G S T A R T E D This program is very easy to use. In virtually all cases, the information you enter is directly opposite a self explanatory text. In addition, there will also be a message near the bottom of the screen (next to a blinking pointer) each time a new bit of information is required. In the event that the program encounters a problem, an audible alarm is sounded and an appropriate course of action is displayed for you to take. Any DOS Operating System messages will appear on the single bar line at the bottom of the screen. Those generally tend to crash a program but don't hurt anything in most cases. Just start the program over if this occurs. To Run the program, simply type "MTG" You should see a display with the words "The Mortgage Miser" displayed in bold letters. Press "Enter" again. If you have the UNREGISTERED Version, then the next screen you should see is the credits and registration screen. In the Registered Version, you will not see this screen at start up time. Please press "Enter" again. At this point, you should be at the MAIN MENU. pg 9 THE MAIN MENU From the MAIN MENU, you are presented with 6 Options from which to select. You can execute any of these by pressing an "F-Key" (Function Key). You can also exit the program by pressing the Escape <Esc> Key. All other screens will eventually bring you back to this point under normal operating circumstances. Press "F1" from the MAIN MENU and you will be presented with a brief description of what this program can do. Press any key to return to the MAIN MENU. Press "F2" from the MAIN MENU and a screen with text that asks for information should appear. This is where you would set up new mortgages. Don't get into that yet though. We'll come back to this later. For now, press the <Esc> Key and return to the MAIN MENU. We're just poking around this time..... Press "F3" from the MAIN MENU to Retrieve a Mortgage Model that I put out there for you to see. Press "F4" to review models already created. Now press <Enter> or <Esc> to get back to the retrieval screen. Look at the black box in the lower right portion of your screen. There's a blinking arrow there to catch your attention. Now type the model name "TEST". Information from the model "TEST" should now be displayed on the screen. At this point you have 3 choices: (NOTE: We want the "3rd" one this time because we're just looking.... ) 1 Press any key to accept that model and work with it. 2 Press "N" to reject it and try again. -> 3 Press <Esc> to return to the MAIN MENU Hopefully we're all back together again now at the MAIN MENU. If we aren't, just keep pressing <Esc> from wherever you are until we get there. NOTE: At some point, you may wish to delete models you no longer need. To delete these "files", please refer to the "DEL" function in your DOS manual. Be advised that the Mortgage Models all have an extension of ".MTG" after each file name. You will not see (or refer to) it when working with the Mortgage Miser program itself, but you will need to use it when deleting models with the DOS command "DEL". Press "F4" from the MAIN MENU to solve for unknown factors in a mortgage. Go ahead and play with this one yourself. It doesn't connect to any other part of the Mortgage Miser modeling functions. With this option you can solve for unknown PAYMENTS, INTEREST RATES, LOAN AMOUNTS or MORTGAGE TERMS. When you're done press <Esc> to return to the MAIN MENU. Press "F5" from the MAIN MENU to print a Mortgage Miser order form. Press <Esc> to return to the MAIN MENU. Pressing "F6" will print the documentation that you're already reading so I won't expand on this option. At this point you're ready to start using the Mortgage Miser. pg 10 NEW MORTGAGES From the MAIN MENU, Press "F2". You should now be in the NEW MORTGAGE SETUP Screen. Rather than taking you through this step by step, I'd like you to try it yourself. In the event you make a mistake, the program should correct you. You can't hurt anything here. If you need to change something entered previously, use the ARROW UP key. The TOP half of this screen is where BASIC Mortgage Information is entered, that which is needed to amortize a mortgage. Once you've entered all of the basic mortgage information, you will see the calculated monthly mortgage payment displayed adjacent to that data. Please note, this payment DOES NOT include Taxes and Insurance. It is Principal and Interest ONLY. If this is all you needed to know, you would just press <Esc> to return to the MAIN MENU. If you would like to try other numbers, simply press F2 to start over. To continue, press any other key. The bottom portion is Optional INFORMATIONAL TEXT, and is only necessary for identification. It comes in very handy though if you intend to print out a "Package" Model for yourself or a friend or client. This program has a provision for changes later on, so don't be alarmed if you need to fix something after the fact. If you don't need this information, press Enter. Follow the informational messages at the bottom of the screen until you're finished. When you've pressed the "Return" or "Enter" Key the last time, you should find yourself at The BASIC MORTGAGE INFORMATION Screen. THE BASIC MORTGAGE INFORMATION SCREEN Let's continue through with this example. Press any other key, and you should see 3 questions displayed in the LOWER portion of the screen. If you were to plan Pre-Payments or Interest Rate Changes from the onset of building this model, this is where you'd tell the program you want to do that by placing a "Y" in each corresponding box. Don't worry if you goof and put a "Y" in a wrong place. You get a chance to fix that by pressing "F2" after you've answered all 3 questions. For now let's not answer these with a "Y". Instead, press the <Enter> or <Return> Key 3 times. Notice that the computer defaulted to "N" for all three questions. Now, read the informational messages at the bottom of the screen and then press <Enter> again 1 more time to go to the next screen. Now you should be at the MORTGAGE MODEL ACTIVITY MENU. This is where you decide what you want to do with this model you've just built. pg 11 THE ACTIVITY MENU Screen The ACTIVITY MENU has 7 Options from which to choose. The first 4 have to do with displaying or printing a Mortgage Amortization Schedule or Summary Statistics. I would suggest that you use the "F2" option of this screen when you're simply running "What if" scenarios. That way you don't have to view a lot of material to get to the bottom line. Option "F5" simply bails out of this model and takes you back to the MAIN MENU. Right now, it works the same as the <Esc> Key. Option "F6" is used to save your model to disk when you've finished with it. For this exercise, let's go ahead and select "F6" to save our model before we make any changes. That will give us a starting point from which to make comparisons against variations we might make if we should so choose to later. Press "F6" if you haven't already done so. This screen looks almost exactly like the one we visited in the MAIN MENU overview when we retrieved the model "TEST" doesn't it? Let's give our model a name of "TESTx" and Press the <ENTER> Key. You must be sure that you don't unintentionally give your model the same name of one that already exists. If you should, the previous version will be OVERWRITTEN with the new version you're working with. The screen should display the message " No Variables Saved ". That's because this is a simple mortgage model that we didn't do anything with. Now press any key to continue. You should be back at The ACTIVITY MENU again. Congratulations, you just "saved" (or stored) a model on disk. Now if you should ever want to , you can retrieve that model from the MAIN MENU using Option "F3". If you can't remember its name, then remember that Option "F4" will REVIEW SAVED MODELS. Once you retrieve your saved model, you'll find yourself back at this point where you can work with it again - RIGHT WHERE YOU LEFT OFF !!!! Press "F7" to display the screen that lets you select specific model data elements for change. By selecting F7 you should see a display entitled REVIEW MODEL VARIABLES FOR CHANGE. pg 12 REVIEW MODEL VARIABLES FOR CHANGE Screen If there's one thing you'll need to do when you're running "What-if's" with your model it's make changes. You'll also need to make changes once you're actually using a plan - especially in the Pre-Payments area. That's what this screen is for. It points you to specific groups of information in your model that you might want to change or modify as your model or plan unfolds. This screen is a little different from the others, in that you must press the "F2" Key AFTER you've placed an [X] in the boxes you selected for modification. The cursor bounces around pretty quickly, so look for the box that's blinking before you key in an "X". If you put an [X] in a box you don't really want, just keep pressing the <ENTER> key and you'll come around to it again. Then just hit the <ENTER> key again and it's gone... Go ahead and put an "X" in the box for BASIC MORTGAGE Information or the one for ADDITIONAL TEXT Information. Since we haven't done Variables yet, let's not select any of those just now.... Press "F2" and you should be back at the MORTGAGE SETUP Screen again. If you requested to change the BASIC Mortgage Information or the Additional Information Data from the REVIEW MODEL VARIABLES FOR CHANGE Screen, you can now Press "F2" or "F3" to ERASE that portion of what you had before and start over. NOTE: You can change specific mortgage information at this time, but the program will RETAIN any other information including variables that you had in effect unless you modified or eliminated them as well. You will return to the ACTIVITY MENU again when you've finished with your changes. Follow the informational messages closely when making any changes. One of the most common points of confusion is when a user makes a change to the BASIC Mortgage elements (Mortgage Amount, Term or Rate) and then forgets he/she still has variable factors (like Pre-Payments) in effect. Are you back to The WORKING MENU Yet? After making changes, we probably ought to save the model again. This time you decide whether or not to call it "TESTx" and overlay the old version or give it yet another name - perhaps "TESTy". Your choice. Why not go back to the MAIN MENU now and try option "F4" and see how many models you have out there on disk? Now it's time to work with the Variables. With this model, of course, we could have selected Option "F7" and "added" some Variables, but for our exercise, lets get back to the MAIN MENU and start over with a new model. Please Press "F5" or <Esc> to get back. pg 13 WORKING WITH MORTGAGE VARIABLES From the MAIN MENU, select Option "F2" to set up a new mortgage just like we did in our overview exercises. Set up a Mortgage for $100,000 at 9.5% for 15 years and start it on Month 1 (Jan). Don't bother with the Optional Informational Text following the basic mortgage factors unless you want to. When you reach the BASIC MORTGAGE INFORMATION Screen which displays the payment, etc, press the Return Key to display those 3 questions we bypassed earlier on the LOWER half of the screen. These are the "Variables" and they have to do with Recurring Pre-Payments, Lump Sum Pre-Payments, and Interest Rate Changes. Answer "Y" to all 3 of these for this exercise. In most cases, you won't answer "Y" to the Interest Rate Change question unless you have an "Adjustable Rate Mortgage" or unless you're planning on getting one. NOW, press the <Enter> Key. You've just told the program you want to schedule all 3 of the Variable activities allowed for in the program. Before we start into this section, I want to let you know that you'll need to do some simple arithmetic in your head here. In these Variable activity screens, you'll need to use "Payment Numbers" to start an activity on. By Payment Number, it doesn't mean "Jan 1991", it means payment number "01" or "180" or whatever payment NUMBER it is. Example, if you began your mortgage in January and you're planning variable activity beginning on the first payment of the first year, and then something else beginning on the first payment of the second or third years, you'll use Payment Numbers "01", "13" and "25". Where "13" is the first payment of the second year and so on. If you're already into a mortgage, you'll probably need to get out your statements and do some counting. I would suggest that when you get serious about planning these variables, you first print a complete amortization schedule using a basic mortgage. It will give you the payment numbers you need to use as reference. pg 14 RECURRING PRE-PAYMENTS TO PRINCIPAL In this exercise, we'll be setting up 3 Recurring Pre-Payment schedules for planning purposes. If this were a real plan, and things don't work out the way we'd anticipated downstream, we could go back and make adjustments later using Option "F7" from The ACTIVITY MENU. The prompt is asking you for a Beginning Month from which to START the Recurring Pre-Payment To Principal activity. These Recurring Pre-Payments stay in effect until you optionally choose a future month (Payment Number) to change or stop them. You can turn them off by selecting a Payment Number and a corresponding value of zero. Select payment number "13" and press the <Enter> key. Now enter the amount 100.00 and press the <Enter> key. The screen will display your entry above in the first position of the grid with the words " thru END" following your payment number. Remember, this will stay in effect until you turn it off or change it. Now select payment number 25 and press the <Enter> key. Enter the amount 200.00 and press <Enter>. The screen will display your entry below the first, again with the words "thru END" following. Notice how it changed the first item in the grid from "13 thru END" to "13 thru 24". Now select payment number 37 and press the <Enter> key. Enter the amount 300.00 and press the <Enter> key. See how it works? Now let's make it "hiccup"... Key payment number 8 and Press <Enter>. It doesn't like payment number 8 because you've already scheduled past it. Press <Enter> one more time when you've entered all of your variables. At this point, you're asked if you want to cancel the whole thing and start over. If you made a mistake, press "F2" and the program will simply erase all that you've just entered. You can start keying again if that's the case. Otherwise, just press <Enter> one more time to complete the scheduling of your Recurring Pre-Payments to Principal Variables. Note: If you had selected Option "F7" (MODIFY/CHANGE) from the ACTIVITY MENU and then opted to change any of the variables, you would be presented with a screen displaying all previously scheduled activity for that variable. If you wanted to "Add" additional entries, then you would just begin keying right from where you left off. If your model didn't work out like you'd planned, then just press <Enter> and select the "F2" option to wipe the entire schedule out and start over. pg15 LUMP SUM PRE-PAYMENTS TO PRINCIPAL We're going to set up 2 Lump Sum Pre-Payments to Principal in this exercise. These are similar to the Recurring Pre-Payments To Principal except that when you select a Payment Number, it will be the ONLY Payment Number that the amount you enter will be applied to. These don't re-occur, but they DO take effect IN ADDITION TO any Recurring Pre-Payments you may have scheduled, so be careful and check your Recurring Pre-Payment Plan and make sure you don't have any overlap that you forgot about. Select payment number 9 and press <Enter>. Enter the amount 1,500.00 and press <Enter>. Select payment number 27 and press <Enter>. Enter the amount 2,000.00 and press <Enter>. Note: The Lump Sum Pre-Payment on Payment Number 27 is going to overlap with a schedule we set up in the Recurring Pre-Payment plan. But in this case we want it to - because we're just planning on having $2,000 in additional funds available to us on that month. As you can see in these examples, we would be planning to apply the proceeds from some other additional source of income to our mortgage. This way the money doesn't get spent before it's received. Ever had that happen to you? That's why we call it a plan !!! That's all for this one. Press <Enter> twice and you should be at the INTEREST RATE CHANGE screen. pg 16 INTEREST RATE CHANGES This one is kind of a combination of the first two. You select the payment number you want the Interest Rate to change on and it stays in effect until you tell it otherwise. This type of activity is specifically designed for ARM's or Adjustable Rate Mortgages. Select payment number 13 and press <Enter> (Beginning Payment of year 2) Enter the interest rate 10.5 and press <Enter>. Select payment number 25 and press <Enter> (Beginning Payment of year 3) Enter the interest rate 11.5 and press <Enter>. Select payment number 37 and press <Enter>. (Beginning Payment of year 4) Enter the interest rate 12.5 and press <Enter>. That should do it for interest rate changes for now. Press <Enter> twice and you should be at the ACTIVITY MENU. You've just scheduled all 3 of the variable activity types the Mortgage Miser accomodates. Why not take a look now at the effect of your changes by selecting options F1, F2, F3 and F4. REMEMBER: Catalog your model with Option (F6), if you want to keep it, before exiting to the MAIN MENU. Failure to catalog the model will result in losing your plan and necessitate a lot of rekeying later. pg 17 A M O R T G A G E C O M M E N T A R Y The driving concept behind the development of the Mortgage Miser is that we believe home mortgages are just as much a debt as any other kind of financial obligation, and, as such, they should be dealt with aggressively. There are a lot of people who will argue that you need a home mortgage for tax purposes. We don't subscribe to the notion that you attain financial security with tax credits, but rather by eliminating debt obligations and then making wise choices with your financial reserves (IN OTHER WORDS, COLLECT INTEREST - DON'T PAY IT!!!) To the contrary, we believe that by paying your taxes and using that portion of your income that would otherwise be used to make the lenders wealthy, the average person is far better off. It does take resolve and most of all it takes DISCIPLINE. There's no doubt about it, while you're working to accomplish YOUR goals, your friends and neighbors will probably continue buying "toys" like there's no tomorrow. Hang in there.... There will be a tomorrow! Speaking of tomorrows, statistics show that about 98% of all Americans who reach retirement age either (a) cannot afford to retire, or (b) enter retirement with incomes below the poverty level. The message is fairly clear.... Things don't self organize. YOU ARE RESPONSIBLE FOR PLANNING YOUR SECURITY. You, and no one else! It's a good idea to get started early with your planning. In order to maximize the Pre-Payment concept, be willing to start small at first and get comfortable with the plan. Don't start too aggressively or let yourself get discouraged. YOU CAN'T EAT THE ELEPHANT WHOLE. Take one bite at a time... As you get started, you may soon find yourself looking for "things" you can do without to bring more money into play to be used against the principal. Start small, but DO GET SERIOUS about it if you're going to go after your mortgage. Remember, the earlier money is applied, the greater the impact, and the sooner it's over !!!! By eliminating smaller debt obligations first, you'll have more money to use against your home mortgage. Car loans are significant detractions. We all seem to think we have to have new cars for some reason. Sorry - we don't, especially when we've got a big home mortgage hanging over us. Maybe we can get along with a good used car for a few years until our house is paid for. You can always buy a new car later (if you still think you need it). You may be suprised what you DON'T buy once you get into the habit of it. Focus on debt elimination FIRST. You'll probably be surprised to find out how rapidly you can increase your Pre-Payments once you get started and once you see the results of your actions. The printed model helps make it a concrete plan. Good luck and happy tomorrows from the Mortgage Miser.